Crystal Renn is in an ad for Chanel's downtown New York store, which is reopening this fall. She poses alongside Lagerfeld boytoy Baptiste Giabiconi, whom she calls "the most gorgeous man I have ever seen, hands down."

She explains, "I remember being on set and trying not to stare, but staring at him methodically nonetheless to try to figure out how perfection in a male looks. It's insane." [Fashionista]

The Daily Mail is reporting that sources close to Lion Capital, to which American Apparel owes $80 million (out of total debts of around $120 million), say the firm will likely work with the troubled clothier and relax the terms of its loan. American Apparel is in or will be in breach of several of the loan's covenants; that fact entitles Lion to ask for its $80 million back. Simply put, American Apparel, which is on track to lose around $30-$40 million this year and whose share price is circling the drain, doesn't have $80 million to give it. Being required to pay back the loan, the company recently had to admit, would force it into bankruptcy. In exchange for Lion's lenience, it may ask for a larger ownership share of the company. Dov Charney currently owns 53% of American Apparel; if Lion increased its equity holdings, he would be forced to relinquish majority control. Sounds like a good thing to us. [Daily Mail]

Meanwhile, the Independent reminds us that Dov Charney "admitted to a string of affairs with young employees, and sharing offensive office banter with male and female staffers. Attractive women he met would be paid to participate in wet T-shirt competitions in the company's offices. At least three female staff have filed sexual harassment lawsuits against him, with all the cases settled before reaching trial. One would-be plaintiff's legal complaint said he removes his trousers before business meetings and chairs them in his underpants." The alleged financial irregularities that have caused the company to be subpoenaed by the U.S. Attorney's office also portend nothing good. [Independent]

But inflation, the rising costs of doing business in China, and instability in the prices of raw materials (most notably cotton, which has seen gigantic price increases after failed crops led to shortages) mean that most clothes are getting more expensive to make. [WWD]

"Apparel prices are going to go up. It's as simple as that," says George Feldenkreis, the C.E.O. of Perry Ellis. "The American consumer will have to accept it." [NYPost]

Marc Jacobs underwent a hair transplant in May, shortly after the breakup of his relationship with Lorenzo Martone, to whom he had been engaged. It hurt more than any of his tattoos, the designer reports. "I couldn't sleep on my side, and I couldn't put my head back." [Details]

Twenty-two-year-old Chinese model Liu Wen is the face of Estée Lauder in China, which is both the brand's fastest-growing market, and the Asian country where it has the largest market share. She likes New York's Lower East Side. "It's a very good place because, first, there are so many vintage stores, and I love vintage," she says. "And second, it's close to Chinatown. Sometimes I really miss my mom's cooking." [W]

Ann Taylor has now returned to profitability. The chain made just over $18 million last quarter. [WWD]

Not so for Edun, Ali Hewson's ethical fashion line, which lost $8.7 million last year. However, it's bankrolled by LVMH, so it's not going anywhere. [WWD]

Fashion week is just the beginning for fashion at Lincoln Center. "I want to see fashion on par with all of the other cultural activities here — the ballet, the opera," says Stephanie Winston Wolkoff, director of fashion at Lincoln Center (and former organizer of the Vogue Met ball). As for designers, "I want them to think of this as a destination and a campus, instead of a place to stop in and then leave." [WSJ]